Holiday season 2010 was the best year for retailers in the last 4 years even though December was a poor sales record on it's own. (via) Why? Because people started their holiday buying early! Not that I like to see the Christmas season creep in on Halloween, but it's nice to hear that sales are helping people spread out the buying so that people like me can use a budget to buy gifts instead of plopping it all on credit cards and suffering depression in January when the bill comes in.

After reading this I wondered if other people did the budget thing or even set aside money throughout the year so that they could pay for all the holiday gifts with cash. I know I'm glad I did since I was involuntarily downsized in 2010. It is amazing how $25 a paycheck can add up when it's time to buy gifts (or make them). With 26 paychecks in a year thats around 500.00 when black Friday rolls up on you for 2011.

flickr/cc - gsz
Besides just setting aside money from each paycheck there are other ways find the money to put aside. First, start by setting up a separate savings account that is for your gift giving only and then remember to put the money into the account when you have reduced your budget.

* Cutting Down on Eating Out - lunches out with coworkers can be dropped for one day of the week, those lunches can run 5-6 dollars a day and in a month that's 20-24 dollars that can be instead put into a jar.

* Reduce Your TV Service - Instead of going cold turkey, drop down your tv subscription to basic service for a few months or the summer and sack away the savings. This is also handy if you are coming to the end of a promo and can't get another one, drop down in service for a few month and then pick up the new promos going on later. You could save 50-100 dollars a month right there.

* Limit the Coffee/Donut/Soda Pop Budget - I am really amazed at the queues for Starbucks and other coffee shops in the morning, especially the drive thru part. This wouldn't be a lot of money set aside but if you buy a 4-5 dollar drink and reduce it by one cup a week, you have another 16-20 dollars to put into savings for gifts.

By making some simple changes to your budget NOW, you can plan to have a terrific Christmas. There are plenty of other ways to save money. Just look at what you are currently spending on any one item and try to reduce it by a few dollars each week. Those dollars add up quickly.

Now if you aren't wanting to cut back at all, there are a couple of ways to bring in extra money and set that aside for gifts as well.

* Save Change - I'm a fan of rounding up in my checkbook and by the end of the month I'm a good 15-20 dollars higher in the bank than my checkbook. That extra money goes to savings without a thought. And add into that any change I get throughout the year, I've got around 200-300 dollars that didn't even have to cut back for.

* Going, Going, Gone - Selling off items around the house or found on the curb for trash pickup is certainly a way to make a few extra bucks. Keep the fees to a minimum and try selling the items off through Craigslist first. The idea is to collect it all in a closet and then have yourself a grand yard sale over a warm weekend.

* Tax Refund - Why not set aside 25% of your tax refund for holiday gifts. If you are anywhere near the average tax refund amount of $2900 (via 2008), then that is 725 dollars for gifts without even having to think about money for the holidays the rest of the year!

There you have it, a few ideas to spur you on for a better gift giving in 2011.


  1. Tim Gray // Wednesday, January 12, 2011 8:54:00 AM  

    First step is to cut out spending on gifts, or to readjust your gift "thought pattern". Give things that you already have that another had admired, nothing like giving away art. Find a good deal on a used item, That cobolt blue glass vase you saw at the Second Hand store will make a great gift instead of buying one like it new for 3X the price.

    Finally, are you giving a gift because you want to or because you feel obligated? you are NEVER obligated to give a gift, A card will do fine with a real note in it. Don't feel compelled to give just because it's "socially expected".

  2. Anonymous // Wednesday, January 12, 2011 11:50:00 AM  

    I always budget for gifts, putting it aside monthly in a savings account.
    In the same account I set aside for NEXT year's car and property insurance which for us come due in January. I used to pay monthly, but that cost me a whopping 3% so now I save and RECEIVE interest.

  3. Jane Sanders // Wednesday, January 12, 2011 1:01:00 PM  

    Great tip with the change in your checkbook. I never thought of doing that before, but that change really does add up over the years.

  4. Dawn // Friday, January 14, 2011 4:55:00 PM  

    I think obligation is determined by the family that you grew up in. Not giving in some form, for some families, can cause unneeded tension - That is why budgeting ahead of time is a good idea.

    Good addition! I forgot that, I also keep my saved money in a savings account for the little bit of interest. Why not!

    I was amazed at the amount you can save if you round to the nearest dollar and use your checkcard or checks often enough

  5. Anonymous // Saturday, January 15, 2011 10:55:00 AM  

    Jane - you a) use cheques, b) track each cheque in a chequebook?

    That seems antiquated.